Schaeffler Capital Market Presentation Mobility for tomorrow · Page 12 · Schaeffler Group · Capital Market Presentation·July 2014 Mechatronicfunctions in axlebox bearings: Integrated

Schaeffler Capital Market Presentation

"Mobility for tomorrow"

July 2014

Page 2 · Schaeffler Group · Capital Market Presentation · July 2014

Disclaimer

This presentation contains forward-looking statements. The words "anticipate", "assume", "believe", "estimate", "expect", "intend","may", "plan", "project", "should" and similar expressions are used to identify forward-looking statements. Forward-lookingstatements are statements that are not historical facts; they include statements about Schaeffler Group's beliefs and expectationsand the assumptions underlying them. These statements are based on plans, estimates and projections as they are currentlyavailable to the management of Schaeffler AG. Forward-looking statements therefore speak only as of the date they are made, andSchaeffler Group undertakes no obligation to update any of them in light of new information or future events.

By their very nature, forward-looking statements involve risks and uncertainties. These statements are based on Schaeffler AGmanagement's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differmaterially from those described in the forward-looking statements. Actual results may differ from those set forth in the forward-looking statements as a result of various factors (including, but not limited to, future global economic conditions, changed marketconditions affecting the automotive industry, intense competition in the markets in which we operate and costs of compliance withapplicable laws, regulations and standards, diverse political, legal, economic and other conditions affecting our markets, and otherfactors beyond our control).

This presentation is intended to provide a general overview of Schaeffler Group’s business and does not purport to deal with allaspects and details regarding Schaeffler Group. Accordingly, neither Schaeffler Group nor any of its directors, officers, employees oradvisers nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance shouldbe placed on, the accuracy or completeness of the information contained in the presentation or of the views given or implied. NeitherSchaeffler Group nor any of its directors, officers, employees or advisors nor any other person shall have any liability whatsoever forany errors or omissions or any loss howsoever arising, directly or indirectly, from any use of this information or its contents orotherwise arising in connection therewith.

The material contained in this presentation reflects current legislation and the business and financial affairs of Schaeffler Groupwhich are subject to change and audit.


Agenda

1 Schaeffler at a glance

2 Results FY 2013


in EUR mn

Number of patent registrations in Germany1)

1 Schaeffler at a glanceSchaeffler – A leading technology provider

1) Incl. Germany, Western, Southern and Eastern Europe, Middle East, Africa, Russia and India

Schaeffler Group at a glance

Sales by segment Sales by region

73% Automotive

27%Industrial

58% Europe¹)11%Greater China

Asia/Pacific10%

21%Americas

Number of patent registrations in Germany1)

2010

CAGR +11%

9.5

2011

7.3

2009

11.110.7

2013

11.2

2012

Strong sales growth from 2009 - 1013in EUR bn

4 Leading manufacturer of high-precision componentsand systems for automotive and industrialapplications

4 Global footprint with approx. 79,000 employees inmore than 50 countries

4 Above industry average profitability andrevenue growth

4 Strategic participation in Continental AG


Transmission Systems

Chassis Systems

Engine Systems

Aftermarket

Production Machinery

Energy and Raw Material

Aerospace

Mobility

Aftermarket

1 Schaeffler at a glanceTwo divisions with top three positions in core market sectors

Automotive Industrial


1 Schaeffler at a glanceAutomotive – broad mix of components and systems


Yoketype andstud typetrackrollers Axial/radial roller

bearingswith an outsidediameter of up to4250 mm(up to 12000 mmavailable onspecial request)

Smallest ball bearingwith a 1 mm inside diameter

Sphericalplainbearings

Cylindricalrollerbearingswithdisc cage

Radialinsertballbearings

Needlerollerbearings

Linearguidancesystems

MainspindlebearingsSpherical

rollerbearings

Taperedrollerbearings

Cage-guidedcylindricalcylindricalrollerbearings

Directdrives

INA/FAG catalog with 40,000 itemsRotary tablebearings withmeasuringsystem

Enginebearings

Ballrollerbearings

Housings

The Industrial division delivers solutions and services with around 225,000 products for more than 40,000 customersin over 60 sectors worldwide

1 Schaeffler at a glanceIndustrial – competence in bearings


1 Schaeffler at a glanceOur key success factors – Quality, Innovation and Technology

826

1,832

20122010

1,854

2,100

2011 2013

1,146

2008 2009

1,641

#5 #5 #4 #4 #4 #2

1) Source: Deutsches Patent- und Markenamt (DPMA)

§ 2,100 new patents in 2013

§ Schaeffler is ranked as the No. 2 most innovativecompany in Germany (Ranking in 2012: No. 4)

§ Share of new inventions outside Germany isincreasing

Schaeffler Group –An integrated technology group

with first class quality, innovationstrength and global reachRank in Germany

Number of patent registrations in Germany1) Key aspects


1 Schaeffler at a glanceStrategy refocused – "Mobility for tomorrow"

"Mobility for tomorrow"

Societytrends

§ Urbanization§ Population growth

Technologytrends

§ Increasing complexity§ Digitalization

Environmentaltrends

§ Renewable energies§ Availability of resources

Economictrends

§ Globalization§ Affordability

Key mega trends 4 focus areas

1

3

2

4Energy chain

Environmentallyfriendly drives

Interurbanmobility

Urban mobility


B

Optimization of theconventional drivetrain

Micro-Hybrid /48V-Technology

Full Hybrid / Plug-inHybrid / Electric

Degree ofelectrification

C

A

UniAir Hybrid module Electric Axle Drive

B

Optimization of theconventional drivetrain

Hybrid module /48V technology

Electric Axle

Degree ofelectrification

C

A

Micro Hybrid Hybrid / Electric driveCombustion Engine

1 Schaeffler at a glanceMobility for tomorrow – Environmentally friendly drives1


Schaeffler employees in Chinausing e-bikes and e-scooters

§ NEVs are defined as fully electric or hybridvehicles on four wheels

§ Subsidies for Battery Electric Vehicles (150 kmrange) and Hybrid Electric Vehicles (50 km range)

§ Minimum speed requirement: 100 km/h

§ Openness towards newtechnologies

§ Increasing income§ Pursuit of individual mobility§ Around 20-30 million

e-bikes and e-scooters aresold each year in China

E-bikes and e-scooters

New Energy Vehicles (NEVs)

Schaeffler innovationElectric motor, power electronics, brake, and coolingsystem are installed inside the wheel rim

Driving systems especially forurban use§ Space-saving vehicle concept§ Increased maneuverability

and safety

Concept vehicle Ford Fiesta eWheelDrive

Strong focus on electric mobility in China E-wheel drive

1 Schaeffler at a glanceMobility for tomorrow – Urban mobility2


Mechatronic functions inaxlebox bearings:Integrated wheelset generatorallows energy for freighttransport to be supplied andincludes a monitoring systemfor freight trains

Schaeffler test rig for railway axlebox bearings, Schweinfurt (Germany)

Schaeffler solutions

Main shaft andgearbox bearings,

e.g. for Airbus A380

Assembly of aerospace bearings in Schweinfurt, Germany

Schaeffler solutions

1 Schaeffler at a glanceMobility for tomorrow – Interurban mobility3


For ocean currentpower plants,Schaeffler developsbearing supports thatcan be directlyinstalled in water. Thewater is the mediumthat provides thelubrication.

Schaeffler uses aspecial steel that isresistant to corrosionfor the rolling bearingrings.

Large-size bearing test rig in Schweinfurt, Germany

Schaeffler's spherical roller bearing "X-life" is the classicbearing variant for the rotor main shaft in wind turbines.

Wave power Wind power

1 Schaeffler at a glanceMobility for tomorrow – Energy chain4


Q1 2013 Q1 2014 ∆

Sales 2,756 2,976 +8.0%

EBITDA 512 569 +11.1%

EBITDA margin 18.6% 19.1% +0.5%-pts.

EBIT 355 414 +16.6%

EBIT margin 12.9% 13.9% +1.0%-pts.

Net income1) 233 382 +149 mn

Free cash flow 52 -19 -71 mn

Net debt 6,834 6,172 -662 mn

Leverage ratio2) 2.6 2.6 -

2 Results Q1 2014Overview

1) Attributable to shareholders of the parent company 2) Net financial debt to adjusted EBITDA ratio; prior year figure as per December 31, 2013

in EUR mn


2 Results Q1 2014Revenue up 8.0% (at constant currency 11.2%)

9.9%

10.9%

19.9% 59.3%Americas592 / +2.2%

Greater China324 / +26.2%

Europe1,765 / +6.8%

Asia/Pacific295 / +10.4%

1) Market view (= location of customers)

2,780

Q3

2,811

Q2

2,858

Q1

2,756

+8.0%

Q1

2,976

Q4

11,205

2013 2014

Gross profit margin in %

28.7 28.8 27.2 28.7

28.3

29.1

Salesin EUR mn

Q1 2014 sales by region1)

in EUR mn / Y-o-y growth

Q12013

Q12014 D D excl.

FX effects

Automotive 1,987 2,212 +11.3% +14.4%Industrial 769 764 -0.7% +3.1%

Total 2,756 2,976 +8.0% +11.2%

Sales by divisionin EUR mn


Europe

+11%

Asia/Pacific

+20%

3%

Greater China+30%

+9%

Production of light vehiclesQ1 2014 vs Q1 2013(IHS Automotive)

Operational sales growthSchaeffler Automotive (OEM)Q1 2014 vs Q1 2013(by location of customer)

19%

4%

Americas

+2%

2 Results Q1 2014Sales Automotive – Strong above market growth

World production: +5%Schaeffler Automotive OEM: +16%

(operational sales growth)

1) Schaeffler Automotive sales growth by region is not necessarily an indication of actual end-customer demand by region (e.g. European sales include components and systems sold to customers inEurope who ultimately export the final product to customer locations in North and South America as well as in Asia/Pacific).

§ Schaeffler Automotive again strongly outgrew globalautomotive production in the first quarter 2014

§ All business divisions and all regions contributed tooverall growth

§ Engine Systems: Growth driven a.o. by the top-selling product groups camshaft phasing units andvalve train components

§ Transmission Systems: Growth driven a.o. by drydouble clutches and variable transmission systems

§ Chassis Systems: Growth driven a.o. by ball screwdrives

Regional development Automotive1) Key aspects

in EUR mn Q1 2014 D

Engine Systems 551 +11,3%

Chassis Systems 345 +6,2%

Transmission Systems 936 +16,3%

Aftermarket 382 +6,7%

Total 2.212 +11,3%


Q1 13 Q2 13 Q3 13 Q4 13 FY 14 Q1 14

ReportedEBIT 355 369 314 -56 982 414

ReportedEBIT margin(%)

12.9 12.9 11.2 -2.0 8.8 13.9

Restructuringprovision - - 48 - 48 -

EUinvestigationprovision

- - - 380 380 -

EUinvestigationprovisionrelease

- - - - - -9

AdjustedEBIT 355 369 362 324 1,410 405

AdjustedEBIT margin(%)

12.9 12.9 12.9 11.7 12.6 13.6

2 Results Q1 2014Adjusted EBIT margin at 13.6%

Adjusted EBITin EUR mn

One-off effectsin EUR mn

1) Excl. one-off effects of EUR - 48 mn2) Excl. one-off effects of EUR - 380 mn3) Excl. one-off effects of EUR + 9.5 mn

3693554053)

+EUR 50 mn

Q1Q4

3242)

Q3

3621)

Q2Q1

1,410

Adjusted EBIT margin in %

12.9 12.9 12.9 11.7

12.6

13.6

2013 2014


2 Results Q1 2014Net income EUR 382 mn

Net income Q1 20141)

in EUR mn

Net income1)

in EUR mn

382

-155

459

328

233

Q3Q2Q1

+ EUR 149 mn

Q1Q4

865

2013 2014

1) Net income attributable to the shareholders of the parent company

EBITCostsSales

2,976

382414

Netincome

Taxes/Minorities

Investmentresult

Financialresult

21

-2,562

-115

180

-97


Free cash flowin EUR mn

2 Results Q1 2014Free cash flow minus EUR 19 million

Free cash flow Q1 2014in EUR mn

-19

40

203

52

Q1Q4Q3Q2

334

1631)

Q1

1) Dividend from Continental AG

629

2013 2014

321

155

-19

569

110

CapexΔ Networkingcapital

EBITDA Other

58

Freecash flow

Taxes

60

Interestpayments

Q1 2013 512 -114 -121 -188 52-58 21


2 Results Q1 2014Leverage ratio stable at 2.6

Net financial debtin EUR mn

12/31/13 03/31/14

Gross debt 6,190 6,395

- Cash 300 223

= Net debt 5,890 6,172

- Shareholder loans 443 645

= Net debt w/o shareholder loans 5,447 5,527

÷ LTM EBITDA 1,634 1,691

= Leverage ratio 3.3 3.3

÷ LTM EBITDA adjusted 2,062 2,110

= Leverage ratio adjusted 2.6 2.6

645443

Q1

6,172

Q4

5,890

Q3

5,729

284

Q2

6,475

343

Q1

6,834

301

2.6x2.6x2.7x3.1x3.3x

Gross debt

7,292 7,037 6,089 6,190 6,395

Cash position

458 562 360 300 223

Shareholder Loans

Leverage ratio (Net financial debt w/o shareholder loans / LTM Adjusted EBITDA)

2013 2014

Leverage ratioin EUR mn


3 Financing and capital structureOverview corporate and capital structure

Capital structure (Pro Forma as of May 15, 2014)Corporate structure

Schaeffler Holding

11.8%

Continental AG

SchaefflerTechnologies

GmbH & Co. KG

100%

SchaefflerFinance B.V.

100%

Schaeffler Group

INA BeteiligungsGmbH

100%Schaeffler AG

INA-HoldingSchaeffler

GmbH & Co. KG

100%

SchaefflerVerwaltungs

GmbH

100%

54.0%

Freefloat34.2%

S HoldingFinance B.V.

100%

Debt instrument Nominal inEUR mn Interest Maturity Rating

Scha

effle

rH

oldi

ng

6.875% SSNs 2018 (EUR)1) 800 6.875% Aug-18 B1 / B6.875% SSNs 2018 (USD)1) 3) ~730 6.875% Aug-18 B1 / BJunior Term Loan B1 905 E+5.25% Jun-17 Not ratedJunior Term Loan B2 354 8.50% PIK Jun-17 Not ratedJunior Term Loan B3 110 E+1.25% + 5.25% PIK Jun-17 Not ratedJunior Term Loan B4 286 E+5.25% Jun-17 Not rated

Junior RCF (EUR 200 mn) - E+5.25% Jun-17 Not rated

Schaeffler Holding Debt 3,185

Scha

effle

rG

roup

Senior Term Loan D 250 E+2.875% Jul-16 Not ratedSenior Term Loan E (EUR) 375 E+3.00%2) May-20 Ba2 /BB-Senior Term Loan E (USD)3) 1,168 L+3.00%2) May-20 Ba2 /BB-Senior RCF (EUR 1,000 mn) - E+2.875% Jul-16 Not rated

Total Senior Facilities 1,7937.75% SSNs 2017 (EUR) 800 7.75% Feb-17 Ba2 / BB-7.75% SSNs 2017 (USD)3) ~438 7.75% Feb-17 Ba2 / BB-4.25% SSNs 2018 (EUR) 600 4.25% May-18 Ba2 / BB-

2.75% SSNs 2019 (EUR) 500 2.75% May-19 Ba2 / BB-3.25% Unsec.Ns 2019 (EUR) 500 3.25% May-19 B1 / B4.75% SSNs 2021 (USD) 3) ~620 4.75% May-21 Ba2 / BB-4.25% SSNs 2021 (USD) 3) ~511 4.25% May-21 Ba2 / BB-3.50% SSNs 2022 (EUR) 500 3.50% May-22 Ba2 / BB-

Total Outstanding Bonds 4,469Schaeffler Group Debt 6,262

Total Total Debt 9,447

1) Senior Secured PIK Toggle Notes 2) Floor of 0.75 % 3) Assuming EUR/USD = 1.37

SchaefflerHolding GmbH &

Co.KG

100%


4 OutlookRaised forecast due to strong growth in the Automotive division

ProfitabilityGrowth

Quality Innovation

Sales growth

Capex

Quality policy

Employees

EBIT margin

Free cash flow

R&D expenses

Innovation

>7%1)

(previously 5-7%)

6-8% of sales

12-13%

Positive

Further improve

~ 3,000 new jobs

5% of sales

Maintain leadingposition in patentapplications

1) Excl. FX effects


Schaeffler IR contact

Financial calendar 2014

phone: + 49 9132 82 4440fax: + 49 9132 82 [email protected]/ir

Results Q1 2014: May 21, 2014Results Q2 2014: August 27, 2014Results Q3 2014: November 20, 2014

Investor Relations


BackupCombustion engine remains dominant but will be further electrified

● Trends

Powertrain concepts CO2 legislation worldwide

98%

80%

56%

2%

19%

35%

1%9%

Hybrids Electric

2013 2020 2030

Light vehicle production

Source: University of Duisburg-Essen, 2012

Combustion engine 80

100

120

140

160

180

200

220

240

260

2000 2005 2010 2015 2020 2025

China: 117 gin 2020

EU: 95 gin 2020

Japan: 105 gin 2020

USA: 109 gin 2025

Source: icct, 2013

Light vehiclesin g CO2

Proposed targetEnacted target

USA: incl. light duty vehicles


BackupMeeting stringent US emission targets of 2020 already today

Fuel reduction in %

Technology City HighwayBelt Drive FrictionOptimization 1.0 1.0

Valve Train FrictionOptimization 0.5 0.5

Balance ShaftBearings 0.6 1.0

ThermalManagementModule

1.0 1.0

Adaptive GrillShutters 0.2 0.8

Engine Start-Stop 6.0 2.0AWD Disconnect 2.0 6.0

Wheel BearingsOptimization 0.5 1.0

TC with CentrifugalPendulum-typeAbsorber

3.0 1.0

Total: ~15 ~14

§ Developed in North America for market-specificdemands and customer requirements

§ Schaeffler shows solutions for optimizing NorthAmerican combustion engines and drive trains

§ Additional fuel savings potential up to 15%

Efficient Future Mobility –Schaeffler North America Demonstration Vehicle


§ Ford Focus, 1.0l 3-Zylinder, turbo charger, 92 kW, 114 g/kmCO2, Start/Stop, EU5

§ Mild Hybridization 48V BSA, thermal management module,coated tappets, decoupling belt tensioner, optimized turbocharger, engine control unit, injection system, heatedcatalyst, low-pressure EGR, hydr. clutch actuator, DMF withcentrifugal pendulum absorber

§ Fuel savings potential ~15% (aim ~17%: 95 g/km) andemission reduction EU6c

Gasoline Technology Car Fuel reduction in % (simulation according to NEDC)

Measure ReductionStart/stop 20 km/h 1.1Recuperation 2.6

Torque repartition 0.8

Dedicated braking pedal 0.5Free gear selection 5.4

External exhaust gas recirculation (EGR) 2.0

Electric heatable catalyst 2.0Thermal management module (real simulation) 1.0

Total ~15

Emission reduction

In addition to fuel savings, emission reduction(NMHC, NOx, CO, PM) was achieved to comply withthe guideline EU6c.

BackupNewest concept car Conti/Schaeffler shows further fuel saving potential


BackupSuccessful cooperation with Continental adding value for our customers

ProductDevelopment

AdvancedDevelopment

Research

Transmission Systems§ Hybrid Double Clutch Transmission§ Mechatronics for Drivetrain Actuation

Engine Systems§ Electric Cam Phasing Systems§ Turbo Charger

Chassis Systems§ Anti Roll Stabilizer

Hybridization§ Electric Axle Drives

Automotive Concepts§ Gasoline Technology Car

§ Diesel Eco Drive

§ 48V Democar

Industrial Concepts§ Initiative "Farming 2025"

eMobility§ Wheel Hub Drive

Mechanics/Mechatronics

Expertise

System-orientatedapproach creating

customer value

Electrics/ElectronicsExpertise


"Mobility for tomorrow" by Schaeffler

Documents

Schaeffler Capital Market Presentation Mobility for tomorrow · Page 12 · Schaeffler Group · Capital Market Presentation·July 2014 Mechatronicfunctions in axlebox bearings: Integrated